Several years ago my company, MMTC Media Brokers, represented Air America when it considered acquiring O&Os. From my perspective as a media broker, Air America’s failure had little to do with politics and personalities.
Air America failed because of geography and advertising adjacency dictates.
Remember the state and national election maps in 2008? In state after state, liberal voters were concentrated in major and some medium markets, with a much smaller representation in markets 100+. Thus, Senator Obama carried Virginia, North Carolina and dozens of other states with a majority of the votes but a small fraction of the state’s land area.
Numerically there are far fewer conservatives than liberals, but conservatives are more evenly dispersed throughout the country. In almost every large and medium market, there are enough conservatives to support one or two conservative talk stations. But in almost every small market, there aren’t enough liberals to form the critical audience mass needed to carry the fixed costs of operating a terrestrial commercial radio station.
Consequently it is possible to launch a conservative radio platform – network or otherwise – with the 92+ percent level of national coverage that an advertiser requires if it is to place a national buy. Air America, as well as its predecessors and every liberal syndicated show, can’t possibly replicate that.
Further, many national advertisers do not want their products appearing adjacent to programs that expose corporate wrongdoing. Air America performed a valuable public service scrutinizing the banking, insurance and health care industries, but it did so at an enormous cost – these and other industries didn’t advertise on the network. This is neither right nor wrong – it’s just a fact of life. It’s the same reason why airlines pull their ads from network newscasts when there’s a plane crash. Like it or not, it places liberal talk at a built-in disadvantage.
Given the handicaps of geography and advertising adjacency dictates, liberal talk couldn’t pay as much as conservative talk, and thus couldn’t attract the top management and seasoned on-air talent conservative talk could attract. Therefore the conclusion that Air America failed because it often hired weak management identifies a symptom (although Bennett Zier is an outstanding manager by any standard). The underlying diseases, however, were the unique geographic scatter map of the audience and the unfortunate but understandable reluctance of advertisers to sell products adjacent to critiques of their industries’ shortcomings.
This explains why, consistently, the 20% of the nation self-identifying as conservative is served by over 90% of talk radio programming. Television and newspapers differ from radio in their distribution patterns, per-market outlet counts and fixed cost coefficients, and thus don’t experience the ideological skew that we see in terrestrial radio.
Air America always had to do far more with less. Even the best managers in the nation would have had their hands full making its business plan work.
What is remarkable is that Air America launched at all and lasted as long as it did.
The public looks to our industry for a wide spectrum of viewpoints, including those with which many of us disagree. In a democracy, that’s as it should be. Thus no one of any political stripe should celebrate Air America’s passing. Instead, business people should try to develop HD-2 and HD-3 channels and bring Air America back. If we want to reverse terrestrial radio’s financial distress, our industry must never concede to competing platforms any large segment of committed radio listeners.
–David Honig
President and Executive Director
MMTC Media Brokers
3636 16th Street N.W. #B-366
Washington, D.C. 20010
Tel: 202-332-7005
Fax: 202-332-7511
[email protected]
http://www.mmtconline.org
